There is so much confusion around the ACA, and many have developed their own ideas on how these rules work. Employee Benefits News released some helpful tips on how the process works, and we wanted to clear up some common myths in the group health insurance world.
Myth: The out-of-pocket limits applicable to qualified high-deductible health plans (a.k.a. health savings account-compatible plans) are the same as the ACA limits imposed on health plans.
Truth: Confusingly, the limits applicable to qualified high-deductible health plans are slightly lower than the ACA limits. Thus, a plan sponsor using the ACA limits will generally disqualify the enrollees in the qualified high-deductible health plan from contributing to health savings accounts. Be careful.
Myth: The 2015 annual 4980H(a) “no coverage” penalty is $2,000 per full-time employee (less the first 80) and the 2015 annual 4980H(b) “inadequate/unaffordable” penalty is $3,000 per impacted full-time employee.
Truth: These penalties actually accrue monthly and increased to $173.33 and $260.00 per month, respectively, for calendar year 2015. If the penalties apply for each and every month, the annualized amounts are $2,080 and $3,120, respectively.
Myth: When the regulators say 90 days regarding the maximum waiting period and the maximum administrative period, what they really mean is three full months.
Truth: Apparently, some of our lawmakers may have missed the lesson in grade school regarding Galileo’s discoveries. Or, maybe they believe that our solar calendar has exactly 360 days, I’m not sure. In any event, regarding the ACA, 90 days means 90 days. Complicating matters, 2016 is a leap year!
Myth: Large employers that do not offer health benefits or that qualify for 2015 transitional relief do not have to file the 2015 Form 1095-C/1094-C.
Truth: All employers that averaged 50 or more full-time employees plus full-time equivalents during calendar year 2014 must file these forms. Now is the time to finalize your preparation/distribution/e-filing strategy.
What myths do YOU want demystified?